Tokyo-headquartered Asset Management One has launched a new ETF in Japan which provides exposure to small-cap China A share companies.

The fund provides exposure to small-cap stocks listed on either the Shanghai or Shenzhen stock exchanges.

The One ETF Southern China A-Share CSI 500 (2553 JP) has listed on Tokyo Stock Exchange and is brought to market in partnership with China Southern Asset Management, one of China’s largest asset managers.

The fund is linked to the CSI Smallcap 500 Index, an index constructed from the total universe of China A shares – Renminbi-denominated shares traded on the Shanghai and Shenzhen stock exchanges.

CSI 300 Index constituents, as well as any stocks that rank in the top 300 for market capitalization but are not currently in the CSI 300 Index, are removed from the selection pool.

Remaining stocks are ranked by average daily trading value over the past year in descending order and the bottom 20% are also excluded.

The remaining universe is ranked by market capitalization and the top 500 stocks are selected to form the final index. Constituents are weighted by float-adjusted market capitalization with reconstitution and rebalancing occurring on a semi-annual basis.

Industrials make up the largest sector exposure with a weight of 21.0%, followed by materials (16.3%), information technology (16.1%), consumer discretionary (11.6%), and healthcare (10.1%).

The fund comes with a management fee of 0.84%. It is the first ETF listed in Japan to target the small-cap segment of the China A share universe.